The Government of Spain last Friday approved incentives to stimulate the introduction of the electric vehicle, including direct subsidies for the purchase of such vehicles with a budget of €72 million (US$103 million) for 2011.

EVs will be subsidized for up to 25% of the purchase price, before tax, to a maximum of €6,000 per vehicle (US$8,600).

25% of the gross purchase price of other electric vehicles such as buses, coaches and vans will also be subsidized,with a maximum of €15,000 or €30,000, depending on the type of vehicle as well as range.

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Assuming an average of €6000 Euro subsidy per vehicle, the budget allows for 12,000 vehicles to be subsidized. That's peanuts. We need much larger numbers than that to drive EV costs down. I suppose the combined subsidy effect of Spain, France, UK, etc. will be significant, but it's not like Europe is completely borderless. OEMs also have to invest in local advertizing, distribution systems, etc. Anyway, I guess this is all that a Souther Euro-zone country can afford these days.

Renewable energy in Spain represented 12.5% of total energy generation in 2009. (for electrical production only this goes up to 42%, with half coming from wind) Spain has set the target of generating 20% of its energy needs from renewable energy sources by 2020.

Some autonomous regions in Spain lead Europe in the use of renewable energy technology, and plan to reach 100% renewable energy generation in a few years. Castilla y León and Galicia are especially near this goal, producing in 2006 70% of their total electricity demand from renewable energy sources, and 5 communities produce more than 50% from renewables.

BEVs are a great way of storing renewable energy because most cars spend 90% of their time parked, they just need to be plugged in.

@SJC:
There are substantial set-up costs for lines to build electric cars.
The hope and plan is that if we can reach a world build of around 500,000-1 million a year, costs will have been driven down to a level where they are competitive with combustion engine cars without subsidy.
The real driving force is the increasing scarcity and price of oil, so to some extent the problem contains the seeds of the solution, as continued high petrol prices will make electric viable.
For every 1 million electric cars that hit the road, something like $800 million of oil imports will be saved, so the financial incentives as well as the costs are considerable.

I don't know about world build, but EVs sold in the U.S. will probably be below 100,000 units per year for many years. Everyone keeps saying that if you build more they cost less and this is suppose to be the magic that will bring about millions sold in the U.S. per year. I see no data to support that.